Spanish stocks surge over 3.0 per cent

December 01, 2010 | 20:00

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Spanish stocks surged over 3.0 per cent on Wednesday on the main stock index as the risk premium on government debt eased, a day after hitting a record high level on fears of a spreading eurozone crisis.

source: overoll.com

The Ibex-35 index of heavyweight shares leapt 3.11 per cent to 9,555.3 points in early afternoon trade, led by banks. Number-one bank Santander climbed 5.48 per cent to 7.70 euros and BBVA rose 6.29 per cent to 7.522 euros.

Bank stocks had less losses in recent sessions as the 85-billion-euro ($113-billion) plan to rescue Ireland's debt-ridden banking sector revived market fears over the ability of Spain's banks and lenders to meet debt repayments.

The return for investing in Spanish government 10-year bonds declined to 5.3 per cent from 5.50 percent at Tuesday's close due to in part to successful bond auctions in Portugal and France.

The debt risk premium -- the extra interest paid on Spanish bonds compared to safer German bonds -- ran at a punishing 2.60 per centage points. The premium had nevertheless eased from a record peak of 3.0 per cent the day before.

The stock market surge also followed Prime Minister Jose Luis Rodriguez Zapatero's announcement that his government will sell 30-per cent of the state lottery, offload a bigger stake in the main airport operator and scrap a jobless subsidy as part of new steps to reduce the public deficit.

AFP

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